Malaysian shares drop to six-week lows

bursa-malaysia-ringgitKUALA LUMPUR: Malaysian shares tumbled to six-week lows and the ringgit fell to over three-month lows Wednesday.

According to a report in the Nikkei Asian Review (NAR) this was largely due to a decline in crude prices and uncertainty over global central bank policies.

The benchmark FTSE Bursa Malaysia KLCI fell 0.9 per cent to 1,661.39 points, its lowest level since August 4 and its worst single-session decline in four months.

The index has lost 1.8 per cent in the last three sessions, as caution ahead of the US Federal Reserve and Bank of Japan’s policy reviews next week soured global risk appetite, said the NAR report.

The ringgit declined 0.4 per cent to 4.121, its lowest level since June 3, due in part to the selloff in domestic and global equities.

Crude prices fell almost 3 per cent on Tuesday after the International Energy Agency said the market was expected to remain oversupplied through the first half of next year amid slowing demand and rising supply.

The NAR report said global market direction since late last week had hinged on indications of whether the Fed would raise rates at its meeting next week or not.

Uncertainty about the Bank of Japan’s likely policy outcome next week has also weighed on global risk appetite in recent sessions, according to NAR.

On the KLCI, 25 of the 30 constituents ended lower Wednesday and two closed unchanged, while overall declining issues outnumbered advancing ones 533 to 265.

Malaysia’s largest oil services provider SapuraKencana declined 1.3 per cent to RM1.55, weighed down by falling crude prices.

Public Bank and Maybank declined 1.7 per cent to RM19.46 and 0.6 per cent to RM7.89. RHB Bank and CIMB Group Holdings slipped 1 per cent to RM4.80 and 0.8 per cent to RM4.70.

Mobile operators, the second largest sector on the KLCI, also suffered losses.

Astro Malaysia led gains with a 2.4 per cent advance to RM2.95.